RBS has missed key hurdles in a Bank of England stress test, forcing it to devise new plans in case of a financial crisis. The toughest stress test yet measured the UK’s seven biggest lenders against a global economic crash. RBS performed the worst and was forced to draw up a new capital plan, which has been accepted. The bank said it had “agreed a revised capital plan… to improve its stress resilience”. It said the change came “in light of the various challenges and uncertainties facing both the bank and the wider economy highlighted by the concurrent stress testing process”. The bank said the test applied a hypothetical adverse scenario to the group’s balance sheet as at 31 December 2015, and that it had taken a number of actions since then, including the ongoing run down of “risk-weighted assets”.

One of Britain’s most highly respected economists has hit back at criticisms of economic forecasts. Critics have described them as little better than astrology or soothsaying. Martin Weale, a former member of the Bank of England’s interest-rate setting Monetary Policy Committee, said that forecasts had to deal with uncertainty. They could not be expected to precisely predict the economic future but were based on “sensible inferences from past patterns,” he said. Admitting that some forecasts published before the referendum may have been overly-pessimistic, Mr Weale said economists were constantly testing their models and attempting to rectify areas of concern. Economists had to be aware of “confirmation bias”, looking for facts that supported their own beliefs, he warned.

Campaigners are urging the government not to “cherry pick” different parts of the economy for special trade agreements with the EU after Brexit. Three pro-EU MPs argue this approach risks creating “losers” because almost all sectors are linked to the EU. Tory Anna Soubry, Labour’s Chuka Umunna and Lib Dem Nick Clegg all want the UK to remain in the EU single market. Pro-Brexit Tory Michael Gove says the single market is a “bureaucratic web” which the UK should leave. The three pro-EU MPs are part of Open Britain, which replaced the official Remain campaign after the EU referendum. At an event in London, they will present a report looking at different sectors of the UK economy and their links with the EU. Written by the Centre for Economics and Business Research, it says every sector appeared to benefit from trade within the single market with 3.25 million UK jobs directly or indirectly linked to EU trade.

Black Friday sales this year are likely to top £2bn, say analysts, as shoppers hunt for bargains ahead of an expected rise in prices in 2017. The fall in the value of the pound is forecast to push up the prices of imported goods next year. Black Friday sales last year were about £1.9bn, but retailers are now stretching the one-day shopping extravaganza over several days. Amazon and some supermarkets started their sales up to 10 days ago. By Thursday, the discount retailing site TopCashback reported a 30% increase in spending over last year. While more than £2bn is expected to be spent on Friday alone, the total for the next four days is forecast to rise to more than £4bn once the weekend and Cyber-Monday – an online-only event – are included. But increasingly, Black Friday too is becoming an internet bonanza. According to the online retailing association IMRG, well over half the spend on Black Friday will be done online.

The UK’s “gig economy”, powered by self-employment and casual work, is starting to hit government revenues. Wednesday’s Autumn Statement for the first time showed how it is cutting into the government tax-take. The Office of Budget Responsibility (OBR) estimates that in 2020/21 it will cost the Treasury £3.5bn. Chancellor of the Exchequer Philip Hammond said he would find more effective ways to tax workers in the shifting labour environment. “Technological progress is changing the way people live, and the way they work,” he said. “The tax system needs to keep pace.” But the Association of Independent Professionals and the Self Employed (IPSE) said the government is ignoring the importance of the self-employed sector.

Prices in the UK’s supermarkets will rise by at least 5% over the next six months, according to the former boss of Sainsbury’s. Justin King thinks that, after years of the cost of the weekly shop barely moving, we should expect to see inflation return. Mr King told Newsnight that the fall in the value of the pound would cause “a profound change” for supermarkets. He ran Sainsbury’s for a decade until stepping down in 2014. In that time, the company’s revenue grew almost constantly, but prices rose much more slowly. In recent years, food prices have even had spells of deflation. Mr King, now vice-chairman of the investment firm Terra Firma, says some supermarkets will be “squeezed in the jaws” of resisting price rises while also dealing with increased costs, and says some companies may not survive the squeeze. His claim has been backed up by the trade body that represents many suppliers. Ian Wright, director-general of the Food and Drink Federation, told Newsnight that he expected prices to rise next year by “somewhere between 5 and 8%”. He believes we may not see the full impact of the weak pound for another year, but said it would make the UK grocery market even more competitive than it already is.

In Wednesday’s Autumn Statement, Chancellor Philip Hammond will announce £400m ($500m) funding for a new Digital Infrastructure Investment Fund. Private investors will be asked to match the amount. The money will be aimed at fibre broadband providers who are looking to expand. The UK must move towards providing “fibre-to-the-property” broadband, rather than fibre to the roadside cabinet, the Chancellor will say. Currently only 2% of the UK has access to this “full-fibre” connection, offering download speeds of up to one gigabit per second, according to government figures,
That is 35 times faster than the 28.9Mbps average UK speed internet connection according to Ofcom. Full-fibre provision is already offered by some independent broadband providers such as Hyperoptic, Gigaclear and B4rn, but to thousands rather than millions of customers. Trials of 5G, the next generation of mobile internet, will also continue, although there is no launch schedule yet. George Osborne laid out similar plans in his last budget in March 2016.

Theresa May is to reach out to business leaders by pledging an extra £2bn a year in funding for scientific research and development by 2020. In a speech to the CBI, Mrs May will outline a new fund that will back areas such as robotics and biotechnology and help commercialise new discoveries. The investment will help put post-Brexit Britain at the “cutting edge”, the prime minister is to say. Delegates will call on Mrs May to offer more “clarity” over Brexit. Mrs May’s speech to the Confederation of British Industry in London comes two days before the government delivers its first post-EU referendum budget, in the form of the Autumn Statement. She is to promise a new approach that is about “stepping up, not stepping back” when it comes to intervening in the economy. Speaking about a new industrial strategy challenge fund, she will say: “Britain has firms and researchers leading in some of the most exciting fields of human discovery. “We need to back them and turn research strengths into commercial success.”

MPs are urging the government to halve air passenger duty in next week’s Autumn Statement, saying the tax hampers post-Brexit Britain’s ability to trade outside Europe. The British Infrastructure Group (BIG) claims the tax acts directly against a policy of extending UK business links to the “farthest reaches of the globe”. The tax is set to rise again in April to £150 for some long-haul flights. In a report, BIG said it should be cut by 50%, then scrapped altogether. Grant Shapps, the former international development minister who leads BIG, said Prime Minister Theresa May needs to make good on a promise she gave on Monday to “forge a bold, new, confident future for ourselves in the world”. He said: “Particularly post-Brexit, now is the time to do it.” He added that reducing air passenger duty (APD) could provide an immediate “Brexit dividend” because the government would not have to wait until Article 50 is triggered to make the cut.

Concerns RBS (RBS.L) may be fined between $5bn (£4bn) and $12bn in the US are preventing the government from selling shares in the bank, MPs have heard. RBS faces a settlement with the US Justice Department over claims it mis-sold toxic mortgage securities in the run-up to the financial crisis of 2008. The size of that fine is weighing on the value of the bank, said James Leigh-Pemberton, the head of the body that manages the public’s stake in RBS. Mr Leigh-Pemberton, the chairman of UK Financial Investments, told MPs that financial markets had speculated on the size of the settlement.

First-time buyers need more support to halt the decline in home ownership, a study by one of the UK’s biggest housebuilders has concluded. Long-term building targets were also required to avoid “kneejerk” policy moves, the Redfern Review said. It found home ownership rates in England fell from 71% to 64% over 12 years, with the steepest drop among young people. Labour, which commissioned the report, said it showed a “lost generation”. Among 25-34 year olds, the rate of home ownership fell from 59% in 2003 to 37% in 2015, according to the review led by Pete Redfern, chief executive of Taylor Wimpey. Lower incomes for younger people since the financial crisis in 2008, as well as their more limited access to mortgage finance, were major contributing factors, he said. To help them back on the housing ladder, Mr Redfern said schemes such as Help to Buy, which allows househunters to pay smaller deposits, should be targeted more exclusively at first-time buyers.

US cigarette maker Reynolds American has rejected a buyout offer worth $47bn (£38bn) from British American Tobacco (BATS.L), according to reports. British American already owns 42% of Reynolds, the company behind brands including Camel and Newport. Last month it proposed buying the rest of the business to create the world’s biggest tobacco firm. But both Reuters and Bloomberg report the deal has been rejected. Reynolds declined to comment on the reports. British American, which makes brands including Rothmans, has been a shareholder in Reynolds since 2004. The FTSE 100 company is offering $20bn in cash and $27bn in shares for the US business. At the time of the bid BAT said the merger was “the logical progression in our relationship” and estimated it could produce cost savings worth $400m.

Dominic Chappell, the serial bankrupt who bought BHS for £1, has been arrested in relation to an unpaid tax bill of about £500,000. He was arrested on 2 November by HM Revenue and Customs. HMRC did not confirm the identity of the “49-year-old businessman”, but Mr Chappell told ITV News he had been arrested. The tax related to the profits he made from the department store chain before it collapsed. Mr Chappell’s company, Swiss Rock, was paid at least £1.6m by BHS following his controversial purchase of BHS from Sir Philip Green. The Guardian reported that Swiss Rock owed £365,000 in VAT and £196,306 in corporation tax. Speaking about Swiss Rock’s tax bill in September, Mr Chappell told the paper: “There was a return that was made in error; they [HMRC] have acted upon it and we are rectifying that as we speak.” HMRC began legal action against Mr Chappell to recover the sums, but he has put Swiss Rock into liquidation, making it more difficult for the tax man to obtain the funds.

We are delighted to announce the Beaufort Securities was named ‘Best Advisory Stockbroker’ at the Shares Awards for the third straight year at an award ceremony held at the Grosvenor Park Hotel in London last night. Unlike many awards ceremonies, the Shares Awards are voted for by the general public and we’d like to thank our loyal clients for taking the time to vote for us in large numbers once again.

A trader who operated from his parents’ home in London has pleaded guilty in the US to helping trigger a 2010 Wall Street “flash crash”. Navinder Sarao, 37, pleaded guilty to wire fraud and spoofing. Sarao, from Hounslow, who was shackled in the Chicago courtroom, was told he faces up to 30 years in prison after admitting the charges in a plea deal. The crash on 6 May 2010 wiped nearly $1tn off the value of US shares. Sarao, who traded futures on the Chicago Mercantile Exchange from west London, was sent to the US to face federal charges after last month losing a legal challenge against his extradition. US authorities say he manipulated the market by “spoofing” over a five-year period, contributing to market instability that led to a brief 1,000-point fall on the Dow Jones index in New York. Spoofing is the practice of placing large orders before cancelling or changing them, allowing traders to buy or sell at a profit.

Donald Trump said it would be like Brexit plus plus plus. And for investors as they wake up to the news that of Trump’s victory, the feeling will be very similar to that day in June. The dollar is already weakening against “safe haven” currencies such as the Japanese yen. Sterling is also strengthening against the dollar and gold – the ultimate safe haven dump – is up in value by nearly 4%. US stock market futures – judgements on the direction of travel before the major markets open in America later today – have already been suspended as sell offs overnight led to a 5% fall – the limit before automatic brakes are put in place. In the UK, futures are down 3.5%. The FTSE is likely to have a torrid opening.Two forces are in play. First, many investors are unclear about the economic direction of travel of a Trump presidency, both domestically and in the wider world. And second, Mr Trump has pledged to “tear up” international free trade agreements, a move which many believe will be bad for global economic growth. 2016 has been a remarkable year of volatility and uncertainty in the markets and for investors, as Britain’s exit from the European Union followed the stock market crisis in China. And, don’t forget, we are also in the middle of the biggest, untested monetary experiment ever attempted by central banks following the financial crisis – $12.3tn of quantitative easing, or money printing, to stop the world lurching into deep recession. Investors and markets are no longer sure which way is up.

Marks and Spencer has announced it is cutting the number of its clothing and home stores by 60 over the next five years as part of turnaround plans. But M&S chief executive Steve Rowe said it would increase its total UK estate by opening more food stores. The retailer also plans to exit ten loss-making international markets. M&S reported an 88% fall in pre-tax profit to £25.1m in the six months to the end of September as sales of clothing and food declined. The retailer has over 300 full-range sites and nearly 600 Simply Food shops in the UK.

Tesco Bank’s boss has apologised after thousands of its current account customers were targeted by fraudsters. The bank confirmed some of its customers’ current accounts “have been subject to online criminal activity, in some cases resulting in money being withdrawn fraudulently”. “We apologise for the worry and inconvenience that this has caused for customers,” said Benny Higgins. He said the bank would refund affected accounts “as soon as possible.” “We continue to work with the authorities and regulators to address the fraud and will keep our customers informed through regular updates on our website, Twitter, and direct communication,” he added. The bank earlier said that the number of customers affected were in their “thousands but less than 10,000”. “We can reassure customers that we will ensure they do not lose out financially,” added Mr Higgins. Over the weekend, customers complained about money being withdrawn without permission, cards being blocked and long delays to get through to the bank on the phone. Some cards had been immediately blocked as a precautionary measure, but affected customers would still be able to use online banking and carry out chip and pin transactions, the company said earlier.

Rents across the UK are set to rise considerably faster than house prices over the next five years, according to property agents Savills. It forecast that rents will go up by 19% between now and 2021, while house prices will only rise by 13%. The gap will be even more pronounced in London, where it said rents will rise by 24.5%, and house prices by 10.9%. The reason was “post-referendum economic uncertainty” and weaker consumer sentiment. Next year Savills forecast that average house prices will not increase at all, with falls of up to 2.5% in Scotland and the North East. However prices in the north will start to “outperform” by the end of the five year period. At the same time demand for rental properties will increase, it said, as first-time buyers struggle with affordability.

The regulator said it was seeking redress for BHS’s 20,000 pension scheme members following an investigation. It has sent warning notices to Sir Philip, his retail group, and Dominic Chappell, who was the owner when the department store chain collapsed. But Sir Philip said he had given the regulator “a credible and substantial proposal” for the BHS pension deficit. The 300-page notices could see the billionaire being ordered to pay towards the pension shortfall, which had swollen to nearly £600m by the time BHS went out of business.

UK house prices were unchanged in October, ending a run of 15 successive monthly increases, says the Nationwide. And the annual growth in prices slowed to 4.6% from 5.3% in September. The average price of a UK house fell from £206,015 to £205,904. Robert Gardner, Nationwide’s chief economist, said: “Measures of housing market activity remain fairly subdued.” He added that the after-effects of the introduction of stamp duty on second homes could also be a factor.

HMRC is chasing almost £2bn that is potentially owed in taxes by the UK’s richest people, according to the public spending watchdog. The National Audit Office said HMRC’s specialist unit recovered £416m in 2015 from 6,500 “high net worth individuals” with wealth of more than £20m. But efforts are ongoing to recover an estimated £1.9bn, the NAO said. Each one of the group of 6,500 is assigned their own HMRC official to liaise with over their tax bill. The £416m is in addition to tax the wealthy individuals voluntarily declare, which totalled more than £4.3bn in 2014-15. They often have complex tax affairs involving different countries. The £1.9bn figure of tax that is “at risk” of not being received, is an estimate and not all of it will be owed once each case has been examined in detail, the NAO said.